Small Details in GOP Tax Plan Affect NY Nonprofits in Big Way

The new, complex tax overhaul bill will have a specific and significant impact on nonprofits. Tax reform was shaping up to change not just the finances, fundraising and operations of nonprofits, but our entire identity was challenged through the unsuccessful attempt to repeal the Johnson Amendment.

So what do nonprofit leaders have to know?

There are some changes that didn’t make it into the final bill. Attempts to eliminate private activity bonds (used by nonprofits to finance large projects), to impose an excise tax on tax-exempt organizations and to include payout requirements for donor-advised funds, didn’t make it into the reconciled bill. However, donors may be increasingly likely to establish donor-advised funds by “bunching” several years worth of donations into one year and nonprofits should educate themselves about these vehicles, which have pros and cons. Nor will the bill force museums to become private foundations. The bill also did not increase the volunteer mileage reimbursement rate.

Nonetheless, here are some provisions of the bill that didn’t make headlines, but that every nonprofit will have to understand.